While you were sleeping: Solid US jobless claims
March 7 (BusinessDesk) – Wall Street climbed, pushing the Standard & Poor’s 500 Index to a fresh record high, after better-than-expected US jobs data bolstered optimism about the pace of recovery in the world’s largest economy.
Initial jobless claims dropped by 26,000 to 323,000 in the week ended March 1, according to Labor Department data.
"Initial claims returned to a more normal level, consistent with a healthy labour market turnover," said Yelena Shulyatyeva, an economist at BNP Paribas in New York, told Reuters.
The latest data underpinned optimism for the government’s employment data, scheduled to be released on Friday morning in Washington. Companies added 150,000 workers in February, according to separate surveys of economists by Bloomberg News and Reuters.
Philadelphia Federal Reserve Bank President Charles Plosser said he believed the US economy was “continuing to improve at a moderate pace,” adding that he expects growth of about 3 percent this year.
“Prospects for labour markets will continue to improve, and I expect the unemployment rate will continue to decline, reaching 6.2 percent or lower by the end of 2014,” Plosser said in a statement of his talk at the Official Monetary and Financial Institutions Forum in London, the UK.
“On monetary policy, we must back away from increasing the degree of policy accommodation in a manner commensurate with an improving economy,” Plosser said. “Reducing the pace of asset purchases in measured steps is moving in the right direction, but the pace may leave us well behind the curve if the economy continues to play out according to the FOMC forecasts.”
In afternoon trading in New York, the Dow Jones Industrial Average rose 0.52 percent, the Standard & Poor’s 500 Index gained 0.37 percent, while the Nasdaq Composite Index advanced 0.17 percent. Earlier the S&P 500 climbed to a record high 1,881.94.
Shares of Caterpillar and JPMorgan Chase gained, last up 1.8 percent and 1.2 percent respectively, leading the increase in the Dow.
So far in 2014, the S&P 500 has added 2.2 percent, while the Nasdaq has risen 4.8 percent. The Dow has lost 0.3 percent in the same period.
In Europe, the Stoxx 600 Index edged higher to close at 337.28. The gauge, which has fallen 0.2 percent so far this week amid tension over Ukraine, is 0.3 percent away from a six-year high reached February 25, according to Bloomberg News.
The UK’s FTSE 100 rose 0.2 percent, while France’s CAC 40 added 0.6 percent. German’s DAX finished the session little changed from the previous close.
The European Central Bank maintained its benchmark interest rate at a record low 0.25 percent, as had been expected by most economists and forecast a gradual increase in inflation.
“The news that has come out since the last monetary policy meeting are by and large on the positive side,” ECB President Mario Draghi told reporters in Frankfurt on Thursday, according to Bloomberg. He said while there were political risks to what was happening in Ukraine, it was too early to say, except for Russia, what the global economic impact would be.
Meanwhile the Bank of England kept its key rate at 0.5 percent and its bond-buying plan at 375 billion pounds.